Dana Petroleum announces a deal which delivers three additional exploration wells offshore Norway in partnership with Det norske oljeselskap ASA (‘Det norske’), the second-largest operating company on the Norwegian Continental Shelf. Dana is also pleased to report on progress with additional drilling plans for the UK and Egypt.
Dana’s wholly owned subsidiary Dana Petroleum Norway AS has entered into swap arrangements with Det norske in respect of a number of assets on the Norwegian Continental Shelf. The agreements are subject to standard co-venturer and governmental approvals.
Dana will acquire from Det norske a 25% interest in PL450 and also 10% interests in both PL035B and PL362 in exchange for a 10% interest in PL027D. Det norske is also farming into block PL027D under a separate transaction with another company. PL035B and PL362, which are operated by StatoilHydro, are situated to the east of the Frigg field in the Norwegian North Sea. The large gas-condensate Fulla prospect is scheduled to be drilled on the border between these two licences in October 2008. In PL450, which lies just west of the Ula field and is operated by Det norske, drilling is planned late 2009 or early 2010 with the likely target being the Storebjørn prospect. Drilling is also scheduled on PL027D, close to the producing Jotun oil field, where the Eitri oil prospect will be targeted in late 2008 or early 2009 using the Bredford Dolphin rig provided by Det norske. As part of this transaction, Det norske has also committed to provide a second rig slot to drill a further structure on this block later in 2009. Dana will retain a 40% interest in PL027D for both exploration wells and continues to hold its 45% stake in the nearby Jotun oil field.
In the UK North Sea, following the recent significant oil discoveries at West Rinnes and East Rinnes, Dana has now secured semi-submersible rigs to drill two further wells in the area. The South-East Rinnes structure will be drilled late in 2008 using the Stena Spey rig. Then, in Q1 2009, the Byford Dolphin will be used to drill the South-West Rinnes prospect. Both of these wells will be operated by Dana.
In Egypt, Dana is working closely with its 50/50 partner Gaz De France to secure a rig for further drilling in the Nile Delta, following the recent successful gas discovery on the West El Burullus concession. Operator IEOC is currently abandoning the West Gihan-1 exploration well in the Gulf of Suez (Dana 20%). Reservoir sands were found as prognosed in the Nubia formation, however these were non-hydrocarbon bearing at this particular location and the partnership group will now consider further opportunities in this block. Dana recently announced it had contracted the IO3 jack-up rig for drilling in the Gulf of Suez through until January 2009. The Company is now pleased to report it has agreed a further 6 month extension to this rig contract which means it is available to drill continuously for Dana through until mid 2009.
Elsewhere in Africa, discussions are progressing well regarding rigs for drilling in Morocco and Mauritania.
Commenting on the news, Tom Cross, Dana’s Chief Executive said:
"The Norway deal delivers three further exploration wells for Dana within the next 18 months. Each of these wells provides the potential for material reserve additions with an attractive chance of success close to existing production infrastructure. Taken together they significantly broaden Dana’s portfolio in Norway.
Dana is fast-tracking a further two wells in the UK’s Rinnes area to help determine the total oil reserves in this prolific Brent fairway, around our operated Hudson oil field, so that development plans can be optimised.
So far in 2008, Dana has discovered the West Rinnes and East Rinnes oil fields in the UK and made an important gas find at West El Burullus with our first well offshore Egypt. A further 10 exploration wells are planned for the second half of the year."
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